Correlation Between Build A and Contextlogic
Can any of the company-specific risk be diversified away by investing in both Build A and Contextlogic at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Build A and Contextlogic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Build A Bear Workshop and Contextlogic, you can compare the effects of market volatilities on Build A and Contextlogic and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Build A with a short position of Contextlogic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Build A and Contextlogic.
Diversification Opportunities for Build A and Contextlogic
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Build and Contextlogic is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Build A Bear Workshop and Contextlogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contextlogic and Build A is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Build A Bear Workshop are associated (or correlated) with Contextlogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contextlogic has no effect on the direction of Build A i.e., Build A and Contextlogic go up and down completely randomly.
Pair Corralation between Build A and Contextlogic
Considering the 90-day investment horizon Build A is expected to generate 5.64 times less return on investment than Contextlogic. In addition to that, Build A is 1.08 times more volatile than Contextlogic. It trades about 0.02 of its total potential returns per unit of risk. Contextlogic is currently generating about 0.13 per unit of volatility. If you would invest 671.00 in Contextlogic on August 30, 2024 and sell it today you would earn a total of 40.00 from holding Contextlogic or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Build A Bear Workshop vs. Contextlogic
Performance |
| Timeline |
| Build A Bear |
| Contextlogic |
Build A and Contextlogic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Build A and Contextlogic
The main advantage of trading using opposite Build A and Contextlogic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Build A position performs unexpectedly, Contextlogic can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Contextlogic will offset losses from the drop in Contextlogic's long position.The idea behind Build A Bear Workshop and Contextlogic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Contextlogic vs. PDD Holdings | Contextlogic vs. JD Inc Adr | Contextlogic vs. Alibaba Group Holding | Contextlogic vs. Global E Online |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |